Changing of the guard for PC leader Lenovo
Updated: 2011-11-03 07:56
By Tuo Yannan (China Daily)
Yang Yuanqing (right), CEO and Chairman of Lenovo Group, gives a farewell present to outgoing Chairman Liu Chuanzhi on Wednesday in Beijing. Provided to China Daily
BEIJING - China's largest PC maker, Lenovo Group, announced the resignation of its founder and Chairman Liu Chuanzhi on Wednesday.
The announcement coincided with the release of results for its second fiscal quarter, which ended on Sept 30.
For the quarter, Lenovo recorded an 88 percent year-on-year gain in net profit to $143.9 million, while revenue rose 35 percent to $7.79 billion.
In the second fiscal quarter, Lenovo's worldwide PC shipments rose 35.8 percent year-on-year, against the PC industry's global growth rate of 5 percent.
The company attributed the growth to previous acquisitions and surging sales in overseas markets.
Lenovo's overseas mature markets, such as the United States and Japan, exceeded Chinese sales revenue for the first time in the most recent fiscal quarter, with revenue of $3.3 billion, accounting for 42.6 percent of the company's worldwide sales.
After buying International Business Machines Corp's PC business in 2005, Lenovo announced a $175 million joint venture with Japan's NEC Corp in January this year and the acquisition of Medion AG, a German multimedia and consumer electronics maker, in July.
Added by the sales revenue of the two companies, Lenovo's gross profit for the second fiscal quarter increased 59.8 percent year-on-year, to $948 million, with a gross margin of 12.2 percent.
"We still consider acquisitions as an important method to drive our growth," said Liu.
The company said that Liu, who returned as chairman in February 2009 to help turn the company around in the wake of the global downturn, would end his duties as chairman effective Thursday.
His successor, Yang Yuanqing, will assume the dual roles of chairman and CEO.
Liu said that after Yang takes over, Lenovo won't just focus on acquisitions in the PC sector but will also look at companies in other emerging industries.
"The change of CEO means that Lenovo has emerged from its crisis, which started from 2009, and entered a stable phase," said Wang Jiping, a senior analyst with IDC China.
"Sooner or later, we'll be number one in the global PC market, if we keep growing at the same pace," Yang said.
Wang said Lenovo does have a very strong homefield advantage in the Chinese market, with $3.2 billion sales last quarter, but if it wants to surpass Hewlett-Packard Corp and become No 1 in the global market, it must find new growth drivers and regions beyond China.
Liu will remain chairman of Lenovo's parent company, Legend Holdings, and his focus will be on building the company's core operating assets in new industries such as agriculture and new materials.
He will also help it achieve a listing in Hong Kong between 2014 and 2016.